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TMI Blog1987 (11) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... hree for the assessment year 1973-74 and two for the assessment year 1974-75. The two questions for the assessment year 1974-75 are identical to questions Nos. 1 and 2 for the assessment year 1973-74. The following three questions relate to the assessment year 1973-74 (1) Whether, on the facts and in the circumstances of the case, the bad debts and depreciation constitute 'expenditure' or only notional outgoings ? (2) Whether, on the facts and in the circumstances of the case, bad debts and depreciation are qualified for weighted deduction under section 35C(1) (b) of the Income-tax Act ? (3) Whether, on the facts and in the circumstances of the case, the shortfall of Rs. 1,75,434 towards contribution to pension fund is allowable in fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any product of agriculture, animal husbandry, or dairy or poultry farming, and has incurred, after the 29th day of February, 1968, whether directly or through an association or body which has been approved for the purposes of this section by the prescribed authority, any expenditure in the provision of any goods, services or facilities specified in clause (b) to a person (not being a person referred to in clause (b) of sub-section (2) of section 40A) who is a cultivator, grower or producer of such product in India, the company or co-operative society shall, subject to the provisions of this section, be allowed a deduction of a sum equal to one and one-fifth times the amount of such expenditure incurred during the previous year. (b) The go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices and facilities to the agriculturists as contemplated by the said section. The assessee claimed weighted deduction, i.e., 120 per cent. of the expenditure under the said section for (a) depreciation for its tractors and vehicles, and (b) bad debts. This was initially allowed but after reopening and reassessment, the deduction under these two heads was confirmed to only 100 per cent. as a business expenditure and in weighted allowance or 20 per cent. disallowed on the ground that section 35C contemplated only actual expenditure and these two items are not actual expenditure. Depreciation is claimed in respect of tractors and vehicles used in connection with the services and facilities provided to agriculturists as contemplated by sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in essence, the same. In this case, the bad debt has arisen in connection with the providing of goods contemplated by clause (b) of sub-section (1) on credit. This is also directly and intimately connected with the object of the section and has to be allowed as an expenditure and deduction under this section. We are not concerned in this case with grant of monetary loans or any bad debts as a result of the same. In view of this, the answer to question No. 1 is in the affirmative and in favour of the assessee. Our answer to question No. 2 is also in the affirmative and in favour of the assessee. Question No. 3 : During the previous year relevant to the assessment year 1973-74, it was pointed out to the assessee by the authorities of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oving the superannuation fund, as the case may be ; and subject to such conditions as the Board may think fit to specify in cases where the contributions are not in the nature of annual contributions of fixed amounts or annual contributions fixed or, some definite basis by reference to the income chargeable under the head 'Salaries' or to the contributions or to the number of members of the fund...." In this case, as has been rightly pointed out by the Tribunal, the payment has been made because of a mistaken short-payment in the earlier years. It is, certainly, a contribution on a definite basis, viz., in terms of the staff pension scheme on a percentage of salary and allowances. It is not payment as contemplated by the second part of cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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